United States Securities and Exchange Commission
Washington, D.C.

LITIGATION RELEASE No. 17817 / October 30, 2002

United States v. Raymond G. Parr, Criminal Action No. H-02-CR-75, United States District Court for the Southern District of Texas (Houston Division).

Securities and Exchange Commission v. Funding Resource Group, et al., Civil Action No. 3:98-CV-02689-M, United States District Court for the Northern District of Texas (Dallas Division).

On October 18, 2002, the Honorable Sim Lake, United States District Judge for the Southern District of Texas, sentenced Raymond G. Parr, age 56 of Houston, Texas, a former independent insurance agent, to a term of 27 months in prison, in connection with a $14 million "prime bank" scheme through which Parr used investors' money to pay living expenses and other promoters. In addition, Judge Lake ordered Parr to pay $3 million in restitution. Previously, on May 16, 2002, Parr, pursuant to a plea agreement, pled guilty to one count of mail fraud.

The conduct underlying Parr's guilty plea was the subject of an earlier Commission civil action against Parr and others filed in the Northern District of Texas, Dallas Division, on November 13, 1998. According to the Commission's complaint, from September 1996 through November 1998, Parr and others engaged in a scheme to offer and sell unregistered "prime bank" securities and raised more than $14 million from unwitting investors. In fact, the "prime bank" programs were nothing more than a "Ponzi" scheme. The final judgment against Parr and the others permanently enjoined them from violating the federal securities laws and ordered them to make disgorgement of all monies raised. The Commission and the court-appointed receiver, Michael J. Quilling, managed to recover more than $6 million for return to investors.

Unscrupulous promoters continue to victimize the public with "prime bank" schemes. Accordingly, investors are advised to access the Commission's "Prime Bank" Investor Alert. That provides tips on who to avoid becoming a victim of such scams. The investor alert can be found on the Commission's web site at http://www.sec.gov/divisions/enforce/primebank.shtml